An amendment to the Corporations Regulations 2001 (Cth) will enact a change to the minimum amount for a statutory demand from 1 July 2021, increasing the current statutory minimum of $2,000 to $4,000 to reflect the impact of inflation.
This change means that for a creditor to file a statutory demand from 1 July 2021, the amount of the debt owed must exceed $4,000.
Companies which are currently eligible for temporary restructuring relief will remain subject to the $20,000 threshold amount throughout July 2021 and will be subject to the $4,000 minimum from 1 August 2021.
- From 1 January 2021, the temporary COVID changes that increased the bankruptcy threshold ended. At around the same time there was an amendment to adjust the bankruptcy threshold to increase it from its pre-COVID amount of $5,000 to $10,000. This means:
- the minimum amount of debt that can trigger bankruptcy is $10,000 (which had been increased to $20,000 under COVID provisions); and
The amount of time an individual has to respond to a bankruptcy notice is 21 days (which is reduced from the six months provided under COVID provisions).
If you are an owners corporation or a community, precinct or neighbourhood association and require assistance in issuing a statutory demand or in pursuing the recovery of a levies, please contact our office.
By Zachary Sie and Allison Benson